The mediating effect of strategic orientation and innovations on the effect of environmental uncertainties on the performance of business in the Indonesian aviation industry

2017 ◽  
Vol 59 (6) ◽  
pp. 1269-1278 ◽  
Author(s):  
Adji Achmad Rinaldo Fernandes ◽  
Solimun

Purpose This study aims to (1) examine the mediating effect of strategic orientation on the effect of environmental uncertainties on business performance, and (2) examine the mediating effect of innovations on the effect of environmental uncertainties on performance of the business in the aviation industry in Indonesia. Design/methodology/approach The research design was conducted through a survey, and the testing form was carried out using “Relationship Causal Studies” or a study to analyze the causality among environmental uncertainties, strategic orientation, innovations and performance of branches/stations of airlines in the Indonesian aviation industry. The sample was selected by determining the number of branches/stations of the Indonesian airlines to be selected into the sample, then more than one unit managers were selected as respondents representing their respective branches/stations. The number of the target sample in this study was 250 branches. Techniques used to address the hypotheses of the present study were Descriptive Analysis and Structural Model Analysis. The inferential statistical analysis focuses on the subject of the analysis and data interpretation to draw conclusions. Findings These research findings provide a contextual overview of the aviation industry in Indonesia that activities to make innovations in airline branches play a vital role in encouraging business performance. Moreover, the analysis shows that the more innovative a branch the better its business performance. This corroborates the finding (Spacapan and Bastic, 2007; Talke, 2007) that being highly innovative can ensure sustainable and long-term business performance. Research limitations/implications The findings of this research suggest that innovations mediate the effect of environmental uncertainties on business performance. These findings corroborate the results of previous studies that suitability between strategic orientation and innovations of a company in response to environmental uncertainties will affect performance of the company (Li and Gima, 2001; Manu, 1992). These findings also strengthen the view that companies with a higher level of innovations (innovative) have better business performance and competitive advantages (Kessler and Chakrabarty, 1996; Salavou et al., 2004; Spacapan and Bastic, 2007). Furthermore, based on findings, it can be interpreted that management that is able to overcome barriers to innovations, maximize innovation resources and achieve the target of innovations in the form of creation of better products/services will have better performance. The ability of the management to identify and overcome barriers to innovations and maximize the sources of innovation will generate products or services that can be accepted by the customers and eventually these products and services will be able to compete with better business performance (Blumentritt and Danis, 2006). Practical implications Findings of this research indicate the positive and significant mediating effect between environmental uncertainties on business performance, through the mediation of innovations, competitive conditions of the industrial environment which can encourage organizations to evolutionarily be more innovative in managing business to compete in the long term (Franke, 2007). This is also consistent with the theory of evolutionary economics (Nelson and Winter, 2000) that the old strategy may not suit the changes in the environment, and therefore companies should continue to seek new breakthroughs with persistent improvement and innovations. Social implications Dynamic and competitive conditions of the industrial environment require organizations to more intensively explore sources (capabilities) of innovations and accelerate generation of the innovations (Franke, 2007; Berry et al., 2006; Dobni, 2006; Davila et al., 2006; Spacapan and Bastic, 2007). Contextually, it appears that the competitive conditions of the aviation industry in either the short term or in the long term require business actors to be more innovative and to survive (Franke, 2007). Originality/value Innovations in business models as a new effort in improvisation specific to the business stage of the basic model (not very valuable) become more advanced business processes to produce products that are more valuable for consumers, at a more efficient cost with better profitability (Chesbrough, 2007b). So far, research on the role of innovations in response to environmental uncertainties and implementation of strategies to improve the performance of the environment-strategy-performance (ESP) model is still done partially so that there is no comprehensive model to describe the role of innovations in this ESP model, or let us say that a gap between theories and opportunities to do further research on the role of innovations in the ESP model exists.

2017 ◽  
Vol 59 (6) ◽  
pp. 1211-1219 ◽  
Author(s):  
Adji Achmad Rinaldo Fernandes ◽  
Solimun

Purpose This research aims to examine the moderating effect of strategic orientation on the effect of environmental uncertainties on business performance and the moderating effect of innovations on the effect of environmental uncertainties on performance of the business in the aviation industry in Indonesia. Design/methodology/approach Research data were collected in stages by means of interviews with corporate leaders of Indonesian airlines and branch managers of several airports, as well as with the Directorate of Civil Aviation as the regulator. A pre-test and focus group discussion (FGD) were conducted to directly determine the questionnaire aspects of the research object, following which an immediate revision was made to the questionnaire. The data from the survey used in each variable were obtained from the mail questionnaire survey. The data collected using the survey are the main data used in the present study. Findings The model of environment–strategy–performance (ESP) can work well in improving performance if supported by innovations. These findings deepen the ESP paradigm in the aviation industry (Miles and Snow, 1978; Segev 1987; Covin and Slevin, 1989; Miller and Shamsie, 1996) that during conditions of high environmental uncertainties, strategic orientation, rather than a single response, will be effective if supported by innovations that provide the strategy with flexibility. The initial implications of these modeling results generate the findings that the effect of environmental uncertainties in the aviation industry (classified as strictly regulated) on performance of a company is largely determined by the direction of the strategic orientation and the innovation level. Research limitations/implications Interactions between innovations and environmental uncertainties have a significant negative effect on the achievement of business performance of the branches with a coefficient of 0.02 and a t-value of 2.00, meaning that the innovation level of a branch has an increasingly stronger influence on the business performance of the branch in the uncertain environment with limitations or underestimated by the branch manager or the innovation level of the branch is not supported with airport facilities and services, which means that the provision of airport facilities and services is inversely proportional to the needs of the airline branches. In other words, the variable “innovations” is a moderating variable for the effect of environmental uncertainties on business performance. Practical implications The results of the modeling performed in this research also show that innovations play a major role in the implementation of the ESP model (Blumentritt and Danis, 2006). The empirical phenomena and descriptive analysis results suggest that the Indonesian airlines which have been quite successful and have demonstrated an above-average performance possess higher levels of innovations. This finding corroborates that of previous studies that environmental uncertainties and direction of strategic orientation will determine the ability of a company to overcome the barriers to innovations, by maximizing innovative resources in achieving the target of innovations (Manu, 1992; O’Regan and Ghobadian, 2005; Hult et al., 2003), and more specifically, it indicates that strategic orientation that is prospective in nature leads to a high level of innovations (Salavou et al., 2004). Social implications The research findings indicate that innovations have a central role in the ESP models and are able to offer a new concept as a modification of the ESP model which in the study is called ESIP. The role of innovations in the ESIP model puts innovations as a variable moderating the effect of environmental uncertainties on performance and the effect of strategic orientation on performance. Moreover, based on the summary of the results for the analysis of the ESIP model, the following can be explained: first, environmental uncertainties have a significant and positive effect on the innovation level or the higher the level of environmental uncertainties, the more is the number of the innovations that an Indonesian airline branch creates. External environmental conditions that are likely to be complex and dynamic found in the area of operations make the branch management more able to identify barriers to innovations and manage resources to be more creative and productive for the attainment of the targets of innovations. Originality/value Innovations in business models as a new effort in improvisation specific to the business stage of the basic model (not very valuable) become more advanced business processes to produce products that are more valuable for consumers, at a more efficient cost with better profitability (Chesbrough, 2007b). So far, research on the role of innovations in response to environmental uncertainties and implementation of strategies to improve the performance of the ESP model is still done partially, so that there is no comprehensive model to describe the role of innovations in this ESP model, or let us say that a gap exists between theories and opportunities to conduct further research on the role of innovations in the ESP model.


2019 ◽  
Vol 34 (3) ◽  
pp. 628-642 ◽  
Author(s):  
José L. Ruiz-Alba ◽  
Anabela Soares ◽  
Miguel A. Rodríguez-Molina ◽  
Dolores M. Frías-Jamilena

Purpose This paper aims to investigate the moderating role of co-creation in the implementation of servitization strategies in the pharmaceutical industry in a business-to-business (B-to-B) context. More specifically, this investigation explores the impact of different levels of services (base, intermediate and advanced) on servitization and on performance by using co-creation as a moderating factor. Design/methodology/approach A research framework was developed and empirically tested in the pharmaceutical sector. Data collection was conducted through the online distribution of questionnaires. The final sample included 219 pharmacy stores, and the data were analysed using structural equation modelling. Findings Main findings suggest that when the level of co-creation of the design of services is high, there are significant effects of servitization on firm performance. The moderating effect of co-creation is illustrated in regard to intermediate and advanced services, but results referring to the impact of intermediate services on servitization appear non-significant with a low degree of co-creation. No significant effects could be found for the impact of base services on performance and servitization for both high and low degrees of co-creation. Findings show an impact of advanced services on performance through the mediating effect of servitization when the degree of co-creation is high. Originality/value Most research concerning servitization has been done from the perspective of manufacturers and service providers. This study adds value to the literature because it was designed from a customer’s perspective. Moreover, it contributes towards the conceptualization of the servitization research strategy and business models in a B2B context. This is accomplished through the investigation of the moderating effect of co-creation on the impact of the different levels of services on servitization and on performance.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Behrooz Ghlichlee ◽  
Fatima Bayat

Purpose Within the retail banking sector, the customer-centric business model has become an important and new business trend in recent years. The enhancement of the frontline service employees’ engagement and their customer-oriented behaviors are among the key factors affecting business performance (BP) in this sector of the banking industry. The purpose of this paper is to improve management decisions to enhance BP through examining the relationship between the frontline employees’ engagement and BP while taking into account the mediating effect of customer-oriented behaviors on this relationship. Design/methodology/approach A quantitative approach was adopted to conduct the present study, and the respondents were sampled from a large commercial bank in Iran using a structured questionnaire. Overall, 50 branch managers and 90 frontline employees were selected using random sampling. A confirmatory factor analysis was conducted to ascertain the validity and reliability of the observed items and a structural equation model was used for testing the proposed hypotheses and research framework. Findings The findings showed that customer-oriented behaviors mediated the relationship between the frontline employees’ engagement and bank’s branches’ BP. Higher levels of the frontline employees’ engagement enhance the customer-oriented behaviors. It was revealed that the frontline employees are engaged in their job and organization. Moreover, the engaged frontline employees listen carefully to customers, the customer’s problem is important to them and they complete their tasks precisely for customers. It has been confirmed that customer-oriented behaviors enhance branches’ BP. The bank frontline employees’ engagement and customer-oriented behaviors, in turn, affected the bank’s branches’ financial performance, process performance and employee performance compared with the bank’s key competitors. Research limitations/implications This study highlights the value of empirically establishing how employee customer-oriented behaviors are affected by employee engagement as an integrative construct bringing together BP. Practical implications This study can help improve BP by increasing the frontline employees’ engagement and their customer-oriented behaviors. This study suggests that organizations using the findings of this study could effectively assess their frontline employees’ engagement and their customer-oriented behaviors and then plan for improving them. Social implications This study offers a customer-oriented initiative as a social responsibility to be considered by retail banks. In light of the social exchange theory, the banks valuing customer-oriented can provide employees with knowledge, skills, values and support to develop motivation and abilities to demonstrate customer-oriented organizational citizenship behaviors. Originality/value Previous studies demonstrated that the employees’ engagement affects their customer-oriented behaviors. In addition, studies have referred to the effect of employees’ customer-oriented behaviors on BP. However, to the best of the knowledge, key questions regarding how the employees’ engagement at the branch level fosters customer-oriented behaviors and, in turn, the bank’s branches’ BP, remain unanswered. Hence, this study contributes to the investigation of the mediating role of the frontline employees’ customer-oriented behaviors in the relationship between their engagement and branches’ BP in the retail banking sector.


2016 ◽  
Vol 18 (1) ◽  
pp. 27-52 ◽  
Author(s):  
Hardeep Chahal ◽  
R.C. Dangwal ◽  
Swati Raina

Purpose The main purpose of this study is to examine the synergistic impact of marketing orientation (MO) and strategic orientation (SO) on business performance (BP) and to explore role of entrepreneurial qualification (moderating) and SO (mediating) in MO and BP relationship. Design/methodology/approach Nine hundred small and medium-sized enterprises (SMEs) owners/managers operating in Jammu District, North India, are contacted during October 2013 to February 2014. Findings The study identifies and confirms MO (marketing strategy, customer philosophy, operational efficiency and integrated marketing) and SO (defensive, proactive, analytical and risk-averse) as multi-dimensional constructs. Although both orientations have positive impact on SMEs performance, however, their synergistic impact is weak. In addition, the study also reveals that MO has direct and indirect impact (through SO) on BP. Lastly, there exists moderating role of entrepreneurial qualification between MO and SO. Research limitations/implications The major limitation of the study is the focus on SMEs. Based on the strength of the relationships among the dimensions and sub-dimensions of the MO, SO and BP, replication and validation of research in service sector across the country and globe is required to generalise the results and to develop stronger theory. Originality/value This is the first empirical study to investigate the synergistic impact of two well-established notions – MO and SO. It provides empirical evidence for the claim that synergistic impact of marketing and SO on BP is weak, unlike their respective strong impact on BP. This study also clarifies roles of entrepreneurial qualification and SO in MO and BP relationship.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nicolas Chevrollier ◽  
Fons Kuijf

Purpose This paper aims to explore how the dynamic capabilities sensing and seizing could support a sustainable (either instrumental or stewardship) strategic orientation in the apparel industry. Design/methodology/approach Through qualitative and inductive research design, ten companies from the Sustainable Apparel Coalition, specifically focusing on brands, were researched. Employees in strategic positions were interviewed. Subsequently, thematic analysis was realized to extract findings from both instrumental and stewardship organizations. Findings Instrumental organizations focus on increasing their brand, mainly by following market demands. They sense opportunities via a hierarchical organizational structure that allows for incremental innovation based on internal competition. Stewardship organizations believe in a collective approach toward conducting business effectively. While building a “sustainable case for business”, a stewardship-oriented company senses by involving their stakeholders and seeks unorthodox opportunities using a long-term internal compass as a beacon for decision-making. Originality/value Key capabilities are revealed that allow businesses and managers to reach higher levels of sustainability in a specific sector: the apparel industry. Especially the capabilities of stewardship-oriented companies and its ambidexterity provide a fertile base for future research at the nexus of organization development and sustainability.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Juan Manuel Maqueira ◽  
Luciano Romualdo Novais ◽  
Sebastian Bruque

Purpose This paper aims to analyze the mediating role of Supply Chain Flexibility on the interrelationships binding Lean Production implementation, Mass Personalization and business performance. Design/methodology/approach A random sample of 260 companies obtained from a population of 1,717 Spanish companies that occupy an intermediate position in the supply chain has been used to test the proposed hypothetical framework. Telephone surveys using a computerized system have been used to collect data, obtaining a response rate of 15.6 and a structural equation model has been designed to test the six proposed hypotheses. Findings Companies initially implement Lean Production to optimize Mass Personalization processes and improve business performance. However, in the presence of Supply Chain Flexibility, Lean Production implementation no longer has a direct impact on Mass Personalization and business performance, but it does have an indirect impact through the flexibility it achieves (shown as a total mediating path). Therefore, companies should implement Lean Production to achieve flexibility and thus optimize the Mass Personalization processes and obtain better performance. Originality/value Academics and business managers may have supporting evidence on the role played by the total mediating effect of Supply Chain Flexibility on the relationship between Lean Production, Mass Personalization and business performance. A better knowledge of these management resources and their relationship could affect the way researchers and practitioners approach them, becoming more aware of the important role of the supply chain in competitiveness.


2018 ◽  
Vol 118 (9) ◽  
pp. 1787-1803 ◽  
Author(s):  
Xueyuan Liu ◽  
Haiyun Zhao ◽  
Xiande Zhao

PurposeThe purpose of this paper is to examine the multiple paths of absorptive capacity’s (AC) effect on business performance (BP): direct effect and indirect effects through innovation and mass customization (MC).Design/methodology/approachThe authors examined the role of innovation and MC capability on the relationship between AC and BP. Data from 278 Chinese firms in four manufacturing industries collected by questionnaire are used to empirically examine the proposed model by Structural equation modeling.FindingsThe results show that AC can directly enhance BP, and indirectly through innovation and MC capability. The study also finds that MC capability has a stronger mediating effect than innovation.Originality/valuePrior studies have not yet built linkages between AC and BP with both innovation and MC’s effects. This study provides empirical evidence of the effects of AC on BP and three paths are discussed including AC’s direct effect and indirect effects through innovation and MC to firm’s BP. This study provides a new direction for executives to better understand the movement of knowledge along supply chain and in intra-organizational environment, and of the importance of innovation and MC capability since they are essential carriers for BP enhancement.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carlos F. Gomes ◽  
Mahmoud M. Yasin ◽  
Jorge M. Simões

PurposeWith the growing importance of performance measurement and management, this exploratory study intends to examine the practices of maintenance managers with regards to maintenance measures, as used in their organizations. In this process, the study attempts to uncover the relevant maintenance performance dimensions from the perspectives of the surveyed managers. In addition, the mediating effect of information availability on the main performance measures utilization is studied.Design/methodology/approachThe research at hand is survey-based. It utilizes the responses of a sample of ninety-five (95) experienced maintenance managers to identify the most relevant maintenance performance measures. Factor analysis is then utilized to uncover the important dimensions of performance, as seen by the respondents. Additionally, using the Partial Least Squares method, several models were studied.FindingsThe findings of this exploratory research appear to suggest that maintenance managers are beginning to broaden their perspective with regard to performance management. While machine and plant-related performance measures are still emphasized, maintenance managers are slowly moving toward a wider organizational orientation. While the manufacturing organizations are becoming more and more customer-oriented open systems, the maintenance function of these organizations is still, for the most part, operating under the semi-open system orientation. Overall, it appears that an emerging maintenance strategy is slowly taking shape.Research limitations/implicationsFor the most part, performance measures and measurement related to maintenance have not received enough attention from researchers. Therefore, the literature dealing with the different facets of performance in maintenance has not been forthcoming. The study attempts to fill this apparent gap in the literature. This is important, as maintenance managers are being asked to contribute to the achievement of the competitive strategies of their organizations. Therefore, they must quickly learn how to view maintenance from a coherent strategic organizational perspective. Such a perspective should help in integrating the maintenance, resources, capabilities, and technical know-how in order to serve the strategic goal of their organization. The research at hand is limited to a sample from Portugal. Therefore, the results and conclusions must be interpreted accordingly.Practical implicationsAs maintenance managers struggle to move from a machine-orientation to a more organizational-wide strategic orientation, they are often left with many questions and few answers. This study attempts to bring this problem to the spotlight so that it can receive more systematic empirical and practical research. In this context, the role of maintenance managers in the process of organizational strategy formulation should be examined.Originality/valueThe study presented in this article has practical, as well as theoretical contributions. It deals with an area of performance measurement, which so far has been relatively ignored. It uses a system orientation (closed vs open), in addition to the strategic orientation (single vs multi-faceted strategy) in order to shed some light on the need to have consistency between the nature of the system and its strategic objective.


2014 ◽  
Vol 9 (2) ◽  
pp. 134-152 ◽  
Author(s):  
Juho-Petteri Huhtala ◽  
Antti Sihvonen ◽  
Johanna Frösén ◽  
Matti Jaakkola ◽  
Henrikki Tikkanen

Purpose – The paper aims to examine the role of market orientation (MO) and innovation capability in determining business performance during an economic upturn and downturn. Design/methodology/approach – The data comprise two national-level surveys conducted in Finland in 2008, representing an economic boom, and in 2010 when the global economic crisis had hit the Finnish market. Partial least square path analysis is used to test the potential mediating effect of innovation capability on the relationship between MO and business performance during economic boom and bust. Findings – The results show that innovation capability fully mediates the performance effects of a MO during an economic upturn, whereas the mediation is only partial during a downturn. Innovation capability also mediates the relationship between a customer orientation and business performance during an upturn, whereas the mediating effect culminates in a competitor orientation during a downturn. Thus, the role of innovation capability as a mediator between the individual market-orientation components varies along the business cycle. Originality/value – This paper is one of the first studies that empirically examine the impact of the economic cycle on the relationship between strategic marketing concepts, such as MO or innovation capability, and the firm's business performance.


2004 ◽  
pp. 406-412
Author(s):  
Paul Okunieff ◽  
Michael C. Schell ◽  
Russell Ruo ◽  
E. Ronald Hale ◽  
Walter G. O'Dell ◽  
...  

✓ The role of radiosurgery in the treatment of patients with advanced-stage metastatic disease is currently under debate. Previous randomized studies have not consistently supported the use of radiosurgery to treat patients with numbers of brain metastases. In negative-results studies, however, intracranial tumor control was high but extracranial disease progressed; thus, patient survival was not greatly affected, although neurocognitive function was generally maintained until death. Because the future promises improved systemic (extracranial) therapy, the successful control of brain disease is that much more crucial. Thus, for selected patients with multiple metastases to the brain who remain in good neurological condition, aggressive lesion-targeting radiosurgery should be very useful. Although a major limitation to success of this therapy is the lack of control of extracranial disease in most patients, it is clear that well-designed, aggressive treatment substantially decreases the progression of brain metastases and also improves neurocognitive survival. The authors present the management and a methodology for rational treatment of a patient with breast cancer who has harbored 24 brain metastases during a 3-year period.


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